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On the Slab: Borders UK

When Borders first set up shop in Britain in 1997, its American parent thought it had a sure-fire hit on its hands.

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Published: 01 Jan 2010

Last Updated: 31 Aug 2010

It promised the bookseller's arrival would mean curtains for outdated, musty bookshops, as they found themselves replaced with a chain of modern, open-plan stores offering everything from the latest bestsellers to CDs and a large latte. But as books were increasingly slung into trolleys - both the supermarket and virtual kind - losses at the company began to bite. Less than a year after Channel 4 chairman Luke Johnson bought the UK business in 2007, it reported a net loss of £13.5m - two-thirds what he paid for it.

Cause of death: The post mortem is conclusive: this mass-market bookshop was killed by the web. As books became freely - not to mention cheaply - available on the internet (as well as in supermarkets), it soon spelled the final chapter for one-stop shops such as Borders. Its demise might have come on the anniversary of Woolworths' collapse, but it had been limping along for three years or so. And its fortunes had changed quickly: in 2005, it made £4m profit, but just two years later found itself £10m in the red. When Johnson bought the UK division of Borders as a turnaround project in 2007, he was quoted as saying that WH Smith was 'mad' not to snap it up. It seems that he has changed his mind - he flogged it this summer to a management buyout team and admitted recently: 'It was one of those deals you would prefer not to have done'.

Reincarnation? The retail format that was meant to be the last word in bookselling ultimately led to its failure: no matter how comprehensive Borders tried to be, it could never have a store as big as Amazon. But even in its death throes, Borders did not go quietly - BDO Stoy Hayward recently pulled out of the administration over a 'conflict of interest'. For the 1,000 staff at 45 Borders stores, this is one story that seems unlikely to have a happy ending.